Appraisal Method Of Depreciation

AAA

DEFINITION of 'Appraisal Method Of Depreciation'

A form of depreciation calculation that is based upon appraisal value. The appraisal method of depreciation is calculated by appraising the value of the asset being depreciated both at the beginning and end of the depreciation period. The difference between the appraised values constitutes the amount of depreciation that can be taken.

INVESTOPEDIA EXPLAINS 'Appraisal Method Of Depreciation'

The appraisal method of depreciation assumes that the value of the asset being depreciated is decreasing over the term. If this is not the case, then no depreciation will be reported. Furthermore, this method of depreciation calculation is generally not recognized by GAAP principles.

RELATED TERMS
  1. Appraisal Approach

    A procedure for determining an asset's value. The appraisal approach ...
  2. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
  3. Accounting

    The systematic and comprehensive recording of financial transactions ...
  4. Accrual Accounting

    An accounting method that measures the performance and position ...
  5. Appraisal

    A valuation of property (ie. real estate, a business, an antique) ...
  6. Appraiser

    A practitioner who has the knowledge and expertise necessary ...
Related Articles
  1. Active Trading

    An Introduction To Depreciation

    Companies make choices and assumptions in calculating depreciation, and you need to know how these affect the bottom line.
  2. Forex Education

    Depreciation: Straight-Line Vs. Double-Declining Methods

    Appreciate the different methods used to describe how book value is "used up".
  3. Taxes

    Avoid Capital Gains Tax On Your Home Sale

    If you have property to sell and want to avoid capital gains tax, a Section 1031 exchange may be the answer.
  4. Fundamental Analysis

    Taking Stock Of Discounted Cash Flow

    Learn how and why investors are using cash flow-based analysis to make judgments about company performance.
  5. Investing

    What's a Debit Note?

    A debit note is a document used by a seller to inform a purchaser of a dollar amount owed. As the name indicates, it is a note from the seller that a debit has been made to the purchaser’s account. ...
  6. Investing

    What's Capitalization?

    Capitalization has different meanings depending on the context.
  7. Investing

    Will Intuitive Surgical Shares Benefit Investors?

    Earlier this month, Intuitive Surgical authorized to repurchase up to $1 billion of its common stock. But will it actually benefit investors?
  8. Fundamental Analysis

    The Best 5 Online Accounting Systems For Small Business

    Running a small business can be difficult, but thanks to these online accounting services, taking care of payroll doesn't have to be.
  9. Fundamental Analysis

    Cash Flow From Financing Activities (CFF)

    Cash flow from financing activities is typically the third and final section of the statement of cash flows. It shows changes to cash resulting from activities such as issuing stocks and bonds ...
  10. Investing

    Understanding Cost Accounting

    Cost accounting is the method of financially allocating expenses to goods that are manufactured for resale. Cost accounting is also referred to as managerial accounting, because managers use ...

You May Also Like

Hot Definitions
  1. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  2. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  3. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  4. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  5. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  6. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
Trading Center